Bombarded By Criticism about Health Claims, Subway Also Dinged for [Way] Underpaying Employees

Decades ago, during the height of the low fat diet craze, the Subway sandwich chain proliferated across the nation in short order. Buoyed by powerful marketing messages — one customer, “Jared,” claimed that he lost hundreds of pounds eating nothing but Subway sandwiches — the restaurant soon became an American institution, competing with fast food giants such as McDonalds, Burger King, and Wendy’s.

However, the last few years have delivered serious bad news for the sandwich maker.

Earlier this year, evidence emerged that Subway had been using a “yoga mat” chemical in its bread. This revelation grossed out thousands of consumers and forced Subway to fight a tough PR battle. Meanwhile, many new books and studies have emerged, suggesting that refined flour and bread (Subway’s main ingredients) may be responsible for diverse ills, including diabetes, obesity, heart disease and even Alzheimer’s.

William Davis, author of the bestselling book, Wheat Belly; Dr. David Perlmutter, author of the bestselling book, Grain Brain; journalist Gary Taubes, author of the book, Good Calories Bad Calories; and journalist Nina Teicholz, author of the bestselling, The Big Fat Surprise, all have built compelling cases that Americans really should be eating less bread and instead be stocking up on healthy fats, protein and other “real food.”

Adding to the chaos for the sandwich manufacturer… a CNN Money analysis recently found that: “individual Subway franchises have been found in violation of pay out rules [leading to thousands of FLSA] investigations pending from 2000 to 2013.”

Combined, Subway shops stand accused of 17,000 Fair Labor Standards Act violations, and franchises have had to reimburse Subway workers more than $3.8 million over the years. That’s a significant sum, considering that “many Subway “sandwich artists” earn at or just above the minimum wage of $7.25 an hour.

The Labor Department obviously wants to regulate what’s happening in Subway (and at other fast food joints, including Dunkin’ Donuts and McDonalds). However, the franchise model adopted by these stores makes regulation difficult. If Subway were structured like Wal-Mart, regulation would be much easier. However, Subway franchisees are in many ways considered independent business owners. So regulators have a hard time getting Subway operators to clean up their practices, en masse, and adhere to FSLA norms.

If you or someone you love works at a fast-food restaurant — or any business — that has underpaid you or subjected you to harassment, discrimination, retaliation, the team here at Joseph & Kirschenbaum wants to know. Call us now at (212) 688-5640, or email us at info@jhllp.com for a free consultation.